With Eric Holder suddenly playing hardball with the banks (most notably not US banks), it has not gone unnoticed among the largest European newspapers. The potential $10 billion penalty for BNP Paribas - France's largest bank - for alleged dealings with a sanctioned Iran has been called a "masterful slap," by Le Monde and Le Figaro said the U.S. was making an example of BNP to deflect criticism it had been "lenient with the American banks responsible for the financial crisis." This could make for an awkward week for Obama, not only facing Putin as he visits Europe to celebrate D-Day but as the allies themselves turn on him with France's Hollande likely to raise the matter and, as Bloomberg reports, newly elected National Front party called on the French government to "defend the national interest" in the case.

As Bloomberg reports, following Eric Holder's plan to fine BNP Paribas $10 billion over dealings with sanctioned nations,The French are crying foul...

Le Monde in its May 31 edition called the possible fine a “masterful slap.” Le Figaro newspaper said the U.S. was making an example of BNP to deflect criticism it had been “lenient with the American banks responsible for the financial crisis.” Hollande may raise the matter with Obama this week, Les Echos reported today, without citing anyone.

This would be the largest criminal penalty in US history - which some are claiming is unfair...

“If this results in a guilty plea, it is likely to increase debate in France and the rest of Europe about the essential fairness of U.S. criminal procedures,” said Frederick T. Davis, a lawyer at Debevoise & Plimpton LLP in Paris and a former U.S. prosecutor.

Europe is not happy...

“This affair is part of Washington’s hegemonic ambition in law and commerce,” said Jacques Myard, a lawmaker from Former President Nicolas Sarkozy’s UMP Party. “Washington has the annoying habit of trying to apply its laws outside its jurisdiction and use its strength for commercial ends.”

...

“Megaphone diplomacy is not what’s called for here,” Le Guen said on BFM television. “The United States can’t treat its allies like this.”

...

In a statement on its website, the National Front accused the U.S. of “racketeering,” in an effort to weaken BNP and aid its American rivals. “We demand that the French government not stay idle,” the statement said.

It seems this week might be a busy one for Obama as he visits Europe...

“It would be unacceptable for the French government to do nothing at a time when the European Union is negotiating a free-trade accord with the U.S.,” he said.

And as if that was not bad enough, just this week, Goldman Sachs has downgraded the French bank from "conviction buy" because a potentially meaningful financial penalty in the US curtails the
outlook for capital return.

On excess capital optionality, the Wall Street Journal reported (May 29) that the
US Department of Justice is seeking more than US$10 bn for the alleged violations of US economic sanctions for US$ transactions with certain countries. If this were the case then the hit to CET1 from additional provisions would reach c.110 bp of RWAs and lower the CET1 ratio to 9.5% pro forma on 1Q14. The company has provisioned US$1.1 for a potential penalty; however the final impact could be significantly larger than this.

For purposes of our analysis we incorporate additional provisions in expectation that BNP will face a US legal penalty in the amount of US$7.5 bn, based on the midpoint of the latest two amounts reported in the press (US$ 10bn, WSJ, 5/29/2014; US$ 5bn, Reuters, 5/21/2014).

Recent reports have introduced wide-ranging outcomes. Other examples suggest that settlements can reach the top end of the range (e.g. media put Credit Suisse litigation charge at $1bn, rising to $2.5bn. The settlement on May 20 was $2.6bn). This reduces our 4Q14 CET1 capital estimates to 10.2%.

So - sell French banks and... buy US banks? Seems like the Treasury's Terrorism unit is working full-time these days.

Silly Europeans, you can skim and screw the little guys here in the USA all you want and the government will shrug, but two things you must not do: 1. Double-cross the MIC, and 2. Help people not pay their taxes.

Probably everyone in Europe knows the score. If big banks fleece the American people, c'est la vie. If big banks deal with Iran, however, it upsets a certain lobby that matters more than the American people, and that is a whole different matter. The Frogs know who is pulling the strings there, and what it means politically to push back, and they know Obama is not even the one to talk to.

Besides, even though he has stated in the past many times that the red-green arrow thing is an 'american' affliction (probably has something to do with being part of a group, and for 'americans' the group is all) I still gave AnAnonymous a +1 up green arrow on his comment above.

When someone is correct, they are correct. Who they are is not a mattering thing. :-)

There are new batch of 'americans' on this site. Considering the tension throughout the world, they are easily confused into thinking that 'americans' exclusively mean US American citizens (the big bad US of A) while 'americans' means of course the proponents of 'americanism', who are to be found in many places around the world.

As soon that new batch of 'americans' come to the realization that 'americans' do not mean exclusively US American citizens but mean people who support the 'american' mind, set of beliefs etc... they will downvote, as in a pavlovian reflex, because they know 'american' include them as well.

The way it works in an 'american' world: one might point fingers at anyone but 'americans' Every set of beliefs might be questioned but 'americanism'

That is the contrary. The 'american' french who owed their feeble independence in the 'american' world order to their african backyard, are catching up on their new status of fully integrated lieutnants to the ganglord, the US.

As another sign, an 'american' french car firm is being compelled by the US of A to stop selling cars to Iran (the amount of cars sold to Iran accounts for a sizeable share of their sales volumes)

Thing is that that 'american' french firm sells no car in the US so the US could not call for a boycoot to punish non aligned response to the demand.

These days are the days of 'americans' vs 'americans'.
'Americans' in order to ensure stability to their inconsistent societies relied on one trick: using other people (most of the times, the coloured) as a buffer to soak all the shit that comes out of an 'american' society. And that is a lot because, by nature, 'american' societies are very hostile.

Now the buffers are saturated and there is no other way than going against 'americans'.

Every single 'american' middle class that is trashed in France is room given to sustain the 'american' middle class in the US.

It's short sighted assholes like yourself that cannot see that very few countries in the EU have the political and financial weight to shatter the american made union and by doing so delaying (or possibly denying) the US of the world hegemony it seeks. A case of don't shit where you eat.

The case: very annoying for 'americans' who like to foresee the end of the USD in a near future.

The case settles the hegemony of the USD by all means.

The french american bank is guilty of one thing: having used the USD in as their transaction vehicle.

That is the only thing.

They ran no operation from their US branches, making them impervious to US laws.

They contravened to no international laws.

So what is the angle? The use of the USD as the money is the exclusive monopoly of the US of A, the mecca of 'americanism' on Earth.
As the US of A middle class own the USD, they can dictate what users of the USD do with it.
People using the USD are legitimate recipients for legal actions initiated by the US of A.

It runs how deeply entrenched the status of the USD as the world reserve currency is and the failure the Euro has been.

The USD has absolutely nothing to do the American middle class (other than the fact that they busted their asses for generations working for it to build the greatest economic engine the world has ever known), and everything to do with Bretton Woods, Kissinger, and the City Of London. Really tired of your 'americans' this and that BULLSHIT. Which enlightened fiefdom, free from central bank influence, do you represent?

Wrong! Are you sure you're on the correct website? Every article on ZH, in one way or another, documents the complete and utter destruction of the US middle class over the last several decades. Also, stop making blanket generalizations about 'americans'.

WOW and I thought W's foreign policy was bad. Not only are we destroying the relationship with Russia and China, but making enemies of our allies like Germany & France. Between the NSA spying and the printing presses running full steam, we are losing friends quickly and isolating ourselves from the rest of the world.

Not necessary -- more Germans can speak French than French can speak anything but French. The Germans often seem eager to show off their linguistic abilities as a means of demonstrating their superiority.

The USA is such a bunch of amateur finger pointing chodes. Just fix our problems for once. The US banks are a total crock of shit fraud. Jamie and Lloyd have to go to jail. The DOJ and Obama can be the ones that do it or the next guy can do the job for them. They are protecting nothing but continued failure.

Wall Street kingpins have never forgiven BNP Paribas for being the first large bank to publicly question the value of American mortgage backed securities (MBS). If not for BNP Paribas' actions in effectively downvaluing to zero these derivatives (unsellable), Wall Street could have continued issuing these bogus derivatives for another year. Wall Street insiders who made billions off algorithm generated derivatives still have the money they made off these MBS derivatives, but they could have made even more if not for BNP Paribas' honest accountants.

Got an idea!! Why doesn't BNP pay the penalty to Russia as payment for the natural gas Ukraine will surely need this winter and then deliver the French helicopter carriers to Russia in exchange for the same payment. Then pay, the actual penalty money the US wants. Everyone will be happy then...

The informant who contacted the Manhattan DA about BNP is almost certainly a fiction created to hide the fact that the NSA's Prism global wiretapping program uncovered the BNP trades. In the same way that Prism was the source of so many anonymous tips the DEA used to arrest people for transporting drugs by car and, also, the Prism tip that caused the FBI to renew its lapsed wiretap warrant on then Governor Spitzer. That Prism tip on Spitzer is why acting U.S. Attorney Michael Garcia did not prosecute Spitzer for money laundering (a bogus charge anyway) and the real reason why the Second Circuit Court of Appeals is refusing to unseal Spitzer's wiretap warrant.

Bloomberg: "Authorities in the U.S. first heard about possible wrongdoing by BNP around 2007, when an informant contacted the Manhattan District Attorney’s office, according to two people with knowledge of the probe who asked not to be identified because the matter is private."

Wow, the anti-American sentiment is raging so strongly that people are blind to the other story here:

newly elected National Front party called on the French government to "defend the national interest"

Banksters' interests are now "the national interest" for France, according to the FN. The bankers have the government and the various political parties including Hollande's Socialists, the UMP, and the FN trying to get them out of trouble without BNP having to pay enough to harm dividends or banker bonuses.

“BNP will probably propose to skip the 2014 dividend as a simple way to mitigate the damage,” said Jean-Pierre Lambert, analyst at Keefe, Bruyette & Woods. “This would not be popular with investors, many of whom are dividend orientated.”

He added that it could also lead to BNP cutting the bonus pool for investment bankers and considering raising fresh capital.

Oh noes! No moar bonuseseses! Or will France recapitalize BNP to prevent the bankers from losing their bonus? The real story here is the depth to which private banking is entwined with "national interest" and the lengths to which politicians will go to shelter the banks. Also, that "orientated" is now apparently a word.

Washington is “bullying” UK banks into refusing to support legal exports to Iran, costing British companies hundreds of millions of pounds in lost sales, senior politicians claimed at Westminster on Wednesday.

While US exports to Iran have been rising, Washington is suspected by British parliamentarians of using extraterritorial threats to hinder UK companies wanting to legally export food, pharmaceuticals and medical devices to Iran.

(...)

US export data shows sales of US goods to Iran rose from $211m in 2010 to $313m in 2013. British exports of goods have fallen steadily every year since 2007 from $802m to $159m in 2012.